A domestic relations order is a judgment, decree, or order that is made pursuant to state domestic relations law and that relates to the provision of child support, alimony payments, or marital property rights for the benefit of a spouse, former spouse, child, or other dependent of a participant. A state authority, generally a court, must actually issue a judgment, order or decree or otherwise formally approve of a property settlement agreement before it can be a domestic relations order under ERISA. The mere fact that a property settlement is agreed to and signed by the parties will not, in and of itself, cause the agreement to be a domestic relations order.

Retirement plans are neither permitted nor required to follow the terms of domestic relations orders purporting to assign retirement benefits unless they are QDRO’s. [ERISA §206(d)(3)(B)(ii), IRC §414(p)(1)(B]

A domestic relations order can be a QDRO only if it creates or recognizes the existence of an alternate payee’s right to receive, or assigns to an alternate payee the right to receive, all or a part of a participant’s benefits. For purposes of the QDRO provisions, an alternate payee cannot be anyone other than a spouse, former spouse, child, or other dependent of a participant. [ERISA §206(d)(3)(K), IRC § 414(p)(8)]

QDROs must contain the following information:

• The name and last known mailing address of the participant and each alternate payee;
• The name of each plan to which the order applies;
• The dollar amount or percentage (or the method of determining the amount or percentage) of the benefit to be paid to the alternate payee; and
• The number of payments or time period to which the order applies.

[ERISA §206(d)(3)(C)(i)-(iv); IRC §414(p)(2)(A)-(D)]
There are certain provisions that a QDRO may not contain:

• The order must not require a plan to provide an alternate payee or participant with any type or form of benefit, or any option, not otherwise provided under the plan;
• The order must not require a plan to provide for increased benefits (determined on the basis of actuarial value);
• The order must not require a plan to pay benefits to an alternate payee that are required to be paid to another alternate payee under another order previously determined to be a QDRO; and
• The order must not require a plan to pay benefits to an alternate payee in the form of a qualified joint and survivor annuity for the lives of the alternate payee and his or her subsequent spouse.

[ERISA §§206(d)(3)(D)(i)-(iii), 206(d)(3)(E)(i)(III); IRC §§414(p)(3)(A)-(C), 414(p)(4)(A)(iii)]

There is nothing in ERISA or the Code that requires that a QDRO (that is, the provisions that create or recognize an alternate payee’s interest in a participant’s retirement benefits) be issued as a separate judgment, decree, or order. Accordingly, a QDRO may be included as part of a divorce decree or court-approved property settlement, or issued as a separate order, without affecting its qualified status. The order must satisfy the requirements described above to be a QDRO. In general, however, QDRO’s are typically separate documents from the divorce decree. [ERISA § 206(d)(3)(B); IRC § 414(p)(1)]

A domestic relations order that provides for child support or recognizes marital property rights may be a QDRO, without regard to the existence of a divorce proceeding. Such an order, however, must be issued pursuant to state domestic relations law and create or recognize the rights of an individual who is an alternate payee (spouse, former spouse, child, or other dependent of a participant). [ERISA § 206(d)(3)(B); IRC §414(p)(1); Advisory Opinion 90-46A; see Egelhoff v. Egelhoff 121 S. Ct. 1322, 149 L. Ed. 2d 264 (2001); see Boggs v. Boggs, No. 97-79 (S. Ct. June 2, 1997)]

If an alternate payee is a minor or is legally incompetent, the order can require payment to someone with legal responsibility for the alternate payee (such as a guardian or a party acting in loco parentis in the case of a child, or a trustee as agent for the alternate payee).

Under Federal law, the administrator of the retirement plan that provides the benefits affected by an order is the individual (or entity) initially responsible for determining whether a domestic relations order is a QDRO. Plan administrators have specific responsibilities and duties with respect to determining whether a domestic relations order is a QDRO. Plan administrators, as plan fiduciaries, are required to discharge their duties prudently and solely in the interest of plan participants and beneficiaries. Among other things, plans must establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions pursuant to qualified orders. Administrators are required to follow the plan’s procedures for making QDRO determinations. Administrators also are required to furnish notice to participants and alternate payees of the receipt of a domestic relations order and to furnish a copy of the plan’s procedures for determining the qualified status of such orders.

It is the view of the Department of Labor that a state court (or other state agency or instrumentality with the authority to issue domestic relations orders) does not have jurisdiction to determine whether an issued domestic relations order constitutes a qualified domestic relations order. In the view of the Department, jurisdiction to challenge a plan administrator’s decision about the qualified status of an order lies exclusively in Federal court.
[ERISA §§206(d)(3)(G)(i) and (ii), 404(a), 502(a)(3), 502(e), 514; IRC §414(p)(6)(A)(ii)]

The administrator of an employee benefit plan is the individual or entity specifically designated in the plan documents as the administrator. If the plan documents do not designate an administrator, the administrator is the employer maintaining the plan, or, in the case of a plan maintained by more than one employer, the association, committee, joint board of trustees, or similar group representing the parties maintaining the plan. The name, address, and phone number of the plan administrator is required to be included in the plan’s summary plan description. The summary plan description is a document that the administrator is required to furnish to each participant and to each beneficiary receiving benefits. It summarizes the rights and benefits of participants and beneficiaries and the obligations of the plan. [ERISA §§3(16), 102(b), 29 CFR §2520.102-3(f); IRC §414(g), Treas. Reg. §1.414(g)-1]

Generally, a draft QDRO should be in your hands no later than 7 to 10 days from our receipt of all required information and fee payment. Depending on the particular plan, this could be impacted by our need to have discussion with the plan’s administrative team or QDRO outsourcing team, but this is rare and we not only normally meet the foregoing standard but often deliver a draft QDRO within 48 to 72 hours. If there is a special consideration with regard to timing, please let us know when information is submitted.

This is very dependent upon the particular plan, sponsor and QDRO administrator. In some cases, a QDRO may be approved within a week to 10 days from receipt. However, in some cases, we have seen the process take up to 3 months, and as the plan sponsor has a significant period of time, legally, before they are in violation of QDRO requirements, there is no way to control this. Most times, however, a QDRO will be processed to approval within 4 to 6 weeks.

Your required fee payment, which is found under the tab entitled “QDRO Preparation Fees” is generally paid by credit card through this website at the time information is provided. If you would prefer, however, you may pay any required fee by check sent through U.S. mail.